Mobile phone manufacturer Sony Ericsson reported a third quarter in a row of net profits after dramatic restructuring after a bad patch last year. But its sales for the quarter fell far below expectations.
The Japanese-Swedish group, the fifth-biggest player in the global sector, said that in the three months ending in September, it had made a net profit of €49m, compared to €193m in the red in the same quarter last year.
The company's sales, however, slipped by 1% to €1.6 billion, it said in its earnings statement. The outcome fell far short of the figures expected by analysts who had forecast a net profit of €67m on sales up 13% at €1.87 billion. Sales and the net outcome had plunged in 2009.
Last year the company launched a programme to reduce costs involving an extra loss of jobs amounting to nearly 2,000 cuts.
The difficulty for Sony Ericsson, as for Nokia in neighbouring Finland, has been sudden steep competition from Canadian RiM (Blackberry) and especially from American Apple (iPhone), forcing the company to refocus its business on the high end of the handset market.
Sony Ericsson said it sold 10.4 million handsets in the third quarter, a 26% plunge from the same time a year ago. However, the average sales price has soared as the company has refocused on the high-end, especially on its models based on Google's Android operating system.
In the third quarter, Sony Ericsson averaged €154 per handset sold, a jump of 34% from the same three-month period in 2009.
'Our third consecutive quarter of profitable results illustrates that Sony Ericsson's overall performance is stabilising,' company chief executive Bert Nordberg said in the earnings statement. 'Our strategy to focus on the smartphone segment is succeeding and smartphones now comprise more than 50% of our total sales,' he added.
